The convergence between equity and credit strategies is changing how commercial real estate (CRE) investors pursue opportunities across the capital stack, particularly as borrowers seek more flexible and certain financing solutions in a more constrained market environment.
“To be competitive, a lender needs to offer borrowers a single capital stack solution,” said Matt Jones, CIO of credit investments at Harbor Group International, in an exclusive interview with IREI. “That means being able to deliver a senior mortgage, a mezzanine or preferred equity tranche, or both.”
Jones said borrowers increasingly want a single execution and no syndication risk. By providing a full debt stack solution, the lender can determine how to capitalize that structure “behind the scenes” without interrupting the borrower’s acquisition or refinance timing.
“A lender may put the loan on a warehouse line, split it into an A/B structure and sell a piece, or contribute i
